Summary
The outlook for the global economy into 2026 has improved, according to the latest World Economic Outlook from the International Monetary Fund. By the numbers, the world economy is now expected to expand at a 3.0% rate in 2025 (up from the prior forecast of 2.8%) and at a 3%.1 rate in 2026 (versus the prior 3.0%). Though solid, these rates are below the 2024 growth rate of 3.4% and the long-term historical global growth rate of 3.8%, due to the impact of tariff uncertainty, inflation, and higher interest rates. For advanced economies, growth is forecast at 1.5% in 2025, followed by 1.6% in 2026. These forecasts have been lowered in recent months due to trade wars. Among the advanced regions, the U.S. economy is expected to grow the fastest this year, at a 1.9% rate, while Japan’s forecast is for 0.7% and Europe is estimated at 1.0% (up from the prior forecast of 0.8%). For emerging economies, growth forecasts call for 4.1% in 2025 and 4.0% in 2026. The clear leaders are expected to be India and China, with average growth for the two years of 6.4% and 4.5%, respectively. These growth nations have different drivers: population growth in India, which points toward commodity and industrial-based infrastructure products; and productivity growth in China, which suggests sp
